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Once again EU taxpayer money bankrolling US tech dominance. When will we ever learn to build up our domestic tech industry? And before the chip hipsters crawl

Once again EU taxpayer money bankrolling US tech dominance. When will we ever learn to build up our domestic tech industry? And before the chip hipsters crawl all over my back to prove we ackshually have a powerful domestic semi industry, please name me another EU company, other than ASML (a company 90% of people here never heard of before the chip shortage), that has the same margins, dominance and ability to shape the market, as much as the US based Intel, Quallcomm, AMD, Nvidia, Apple. I'll wait. The thing is, other than ASML, most of our domestic semi companies (NXP, ST, Ericsson, Nordic, Infineon, Bosch, AMS, etc.) are only competing for relatively low margin chips with high competition, therefore bring home relatively little money, compared to their US counterparts which have monopolized high margin sectors (general compute, AI, graphics, etc) and rake in the big bucks. Don't get me wrong, it's great we have our own semi industry, and we make great chips to boot, but I wish we could do more high margin products, as Chinese companies are hot on our heels with massive support from their government. Remember the failed attempt from the merger of ST-Ericsson to take on QUALCOMM's ARM Snapdragon SoCs and modems in the mobile space 10 years ago? I was talking to a former Dutch manager who had a stint there and his reply dropped my jaw: "Yeah, that merger was never meant to ship any chips that can beat Quallcomm, it was just a vehicle designed to suck up as money as possible and funnel it into the right pockets, while some managers pad their resumes so they can move up at other companies later." Source: Former EU semi engineer.

DSingularity 4y ago
That’s called interest on the Marshall plan.
nosianu 4y ago
Right... "TSMC, Samsung want slice of America's $52b chip subsidies" -- https://www.theregister.com/2022/03/28/tsmc_samsung_chip_subsidies/ https://www.theregister.com/2022/03/28/tsmc_samsung_chip_sub... "Intel and Micron pushing hard for subsidies from the US government" -- https://www.pcgamer.com/intel-and-micron-pushing-hard-for-subsidies-from-the-us-government/ https://www.pcgamer.com/intel-and-micron-pushing-hard-for-su... "Subsidy Tracker: Intel" -- https://subsidytracker.goodjobsfirst.org/parent/intel https://subsidytracker.goodjobsfirst.org/parent/intel "Intel boss presses Congress for manufacturing subsidies" -- https://www.theregister.com/2022/03/24/intel_chips_subsidy/ https://www.theregister.com/2022/03/24/intel_chips_subsidy/
- ChuckNorris89 4y ago
  Sure, but that's US money propping up US companies, what's wrong with that?
  - nosianu 4y ago
    TSMC, Samsung are US companies? And what is wrong with Europe propping up a US company? You shifted the goal post from your original comment ("When will we ever learn to build up our domestic tech industry?"). I showed you that the US is doing exactly that, and now you jump to some other argument.
    - birdyrooster 4y ago
      Wow and you got downvoted too… preposterous. You made a great point.
    - zymhan 4y ago
      They were talking about EU domestic production, I think, not the US. Therefore your reply is off-point.
      - deleted 4y ago
        [deleted]
      - deleted 4y ago
        [deleted]
HWR_14 4y ago
Does it really matter which country is the headquarters for the corporate owner? It's still a German plant hiring Germans and subject to German laws. The rule of law exists in both Germany and the US. German citizens can invest in Intel. And, in the event of a US/German war, that plant is and will remain German, not American. I think there's an excellent case for distinguishing that from companies from China, where non-Chinese citizens have a great risk of confiscation of their assets by investing, Chinese companies are subject to a lot of other rules even when operating outside China, etc.
- ferruck 4y ago
  The difference is that patents for inventions made for Intel by Intel employees go to the US, whether or not that employee is an US person. Those inventions, if made by Germans, could instead help the German - or European - tech sector. That's kind of brain drain without actually leaving your country and sustainably hurts European competitiveness.
  - HWR_14 4y ago
    That just kicks the question down the road. It's not like patents don't share the exact same argument. There are US and German patents that only apply in their own countries. What difference does it make where the multinational that owns them receives mail. Unless you think Intel will refuse to do business with a European company vs a US one.
- tut-urut-utut 4y ago
  > Does it really matter which country is the headquarters for the corporate owner? It's still a German plant hiring Germans and subject to German laws. The rule of law exists in both Germany and the US. Of course it matters. The profit goes in the direction of headquarters, tax is paid in the country of headquarters, and the government of the country of headquarters has much bigger influence to the company.
  - ChuckNorris89 4y ago
    >tax is paid in the country of headquarters Tax havens have something to say about that. The French semi giant, ST, is financially incorporated in the Netherlands (STMicroelectronics N.V.), as is the French giant Airbus (Airbus Group N.V.). There seems to be a pattern here. It's almost as if companies don't want to pay taxes, regardless if it's their home country.
mensetmanusman 4y ago
It’s all interconnected, Intel fabs are worthless without ASML, you can think of Intel as almost like a general contractor at this point pulling capabilities from everywhere.
- amelius 4y ago
  ASML should demand 30% of profits, like Apple does with its App Store.
  - lotsofpulp 4y ago
    They do. https://www.macrotrends.net/stocks/charts/ASML/asml-holding/profit-margins https://www.macrotrends.net/stocks/charts/ASML/asml-holding/...
    - amelius 4y ago
      Profit margin is a different thing.
      - lotsofpulp 4y ago
        Ah, I missed “of” in 30% of profits. In which case, I thought Apple’s take was 30% of gross on the app store, not profit?
jimbob45 4y ago
Ideally, this brings a great deal of domain-specific knowledge to the EU and then the workers of this Intel plant are able to go create their own EU plants with their new knowledge. Whether or not that extremely ideal scenario actually happens remains to be seen.
raxxorraxor 4y ago
Should have just bought AMD a few years ago...
mrtksn 4y ago
FTA: Whether or not additional funds are available from the EU is not known. This is just Germany paying Intel to make unreasonable business decision reasonable. These things usually happen for strategic reasons. For example, it could be possible that from purely business perspective it's the best to produce all the food in Africa, Russia or China but this leaves EU vulnerable to stuff going on in these places or conflicts with them, therefore you have common agriculture policy and food import-export controls. The decision makers probably decided that completely relying on foreign IC supply is a risk they cannot afford, therefore they will pay to make it fixed. I wouldn't be surprised if EU also chips in.
deleted 4y ago
[deleted]
april_22 4y ago
there was a strong chip industry in saxony decades ago, but they became way too expensive when china came. they are slowly starting to built back there, but progress is slow. Bosch and Infinion have the fabs there
- april_22 4y ago
  sorry, misspelled infineon
- DocTomoe 4y ago
  You are refering to Robotron, which mostly is known for their Z80s knockoffs (which often were less buggy than the originals.) Given that they did not create chips of their new design, I would not describe them as having been 'strong', though.
  - Matthias247 4y ago
    Maybe more about AMD having had fabs there, which then transitioned into Globalfoundries?
    - DocTomoe 4y ago
      Hm, "decades" implies GDR ... AMD eventually bought some of Robotron's facilities, though.
      - Matthias247 4y ago
        Possibly. But start of 2000 when AMD and Infineon in Dresden where in vogue is also more than a decade ago.
        DocTomoe 4y ago
        True. I like to avoid thinking that way. It makes me feel old.
raverbashing 4y ago
> domestic semi companies (NXP, ST, Ericsson, Nordic, Infineon, Bosch, AMS, etc.) are only competing for relatively low margin chips with high competition Then maybe they should compete? (though those are not small companies - and with most products that are not as popular with Intel but are popular in other areas) I think they missed the ARM boat, possibly. But they should go and ask for a slice of that money.
DocTomoe 4y ago
> please name me another EU company There isn't any. That's because EU taxes and regulations make running a large-scale business less attractive - and because there really is no market for another big-chip manufacturer; if you want to break into that segment (even if it was a 'fair' market), the only way to compete is on the price, and that China can do better.
deleted 4y ago
[deleted]
MoreSEMI 4y ago
Zeiss-makes all the highly complicated mirrors that go into asmls machines XFAB-specialty fab in germany
oytis 4y ago
It would maybe make more sense if it was a foundry offering their services to numerous fabless companies. Having an advanced one in the EU would be beneficial regardless of where the headquarters of the foundry is. But this one is just going to produce Intel chips as I understand, so basically it's just workplaces, and not a huge lot of them compared to the investment made.
jagger27 4y ago
If Intel’s new EU fabs operate under the TSMC foundry model, is that not a good thing for the EU? Let’s say I’m a smaller company in France looking to get a chip made on a bleeding edge node. I don’t have existing contacts in Taiwan. Surely I just go next door to Intel, right? If Global Foundries couldn’t pull off the leap to 7nm even with ASML next door, who do you suggest is capable of doing so other than Intel, Samsung, and TSMC, and is EU based? I have some confidence that the EU would set favourable terms for given the level of investment.
- deleted 4y ago
  [deleted]
audunw 4y ago
If you want Europe to be as attractive as headquarter location of mega-companies as USA is, you may have to compete with USA on a lot of policies (taxes, labor laws, etc) that would turn Europe into a different kind of society. Do we really want that? Many of these mega-companies are publicly listed. Norway alone owns a significant amount of stock in some of these companies. I'm not sure we have a problem. But I'm not gonna complain about trying to change this and get giant high-margin tech company going here in Europe. I'm just not sure how to do it.
- ChuckNorris89 4y ago
  >If you want Europe to be as attractive as headquarter location of mega-companies as USA is, you may have to compete with USA on a lot of policies (taxes, labor laws, etc) that would turn Europe into a different kind of society. Do we really want that? No, but do you really have a choice? When you're selling tech products, you're competing on the international market, against everyone, including USA and China. If you work 35h/week and you get outmatched by a team who worked 60h/week, the end user will not care, they go for the best one, and the others loose. That's how international competition works. And if they can deliver a better product at a cheaper price, they get the customers. The customers don't care if the devs who worked on that product are from US, China, or Europe and if they worked 35h/week or 60+. That's why Europe is so underrepresented in big-tech internationally and the biggest wealthiest European companies are fashion related(LVMH) where the selling point is the name brand without any substance. That's why EU has not developed the iPhone and why Nokia, Ericsson, Sagem, Alcatel are gone from the mobile space.
  - welterde 4y ago
    > That's why Europe is so underrepresented in big-tech internationally and the biggest wealthiest European companies are fashion related(LVMH) where the selling point is the name brand without any substance. Not sure market cap is really the metric here (and only 2 of the top 10 are currently fashion related, the rest is pharma, semiconductor, food, ecommerce, banking, etc.), since those can be easily inflated to completely unreasonable levels and are more an indicator of marketing success than anything else. Maybe take a look at the export statistics and you'll find machines and chemicals taking up a very large fraction. However much more interesting is how much of the global economy depends on certain companies: Siemens automation (larger market share than the next two competitors combined). Chemicals - BASF is currently the largest chemical producer in the world (with also the largest chemical production complex in the world being located in Germany). Semiconductors - Without ASML, Zeiss and Trumpf (nevermind all the chemical companies) you will have a hard time producing the chips in your iPhone or any modern desktop/laptop. No matter how much I am not a fan, but SAP might also be of relevance in a few companies.. Also Nokia and Ericsson are not gone from the mobile space, they just focus more on the backend stuff. So while your phone might no longer be from them, there is a decent chance that your phone will be talking to a Nokia or Ericsson device over the air (especially since Huawei hit a bit of a snag in the US and parts of the EU).
tester756 4y ago
We will have more semico experienced people how actually worked with state of art / bleeding edge stuff with them you'll be able to build start ups, etc.

DSingularity 4y ago

That’s called interest on the Marshall plan.

nosianu 4y ago

Right... "TSMC, Samsung want slice of America's $52b chip subsidies" -- https://www.theregister.com/2022/03/28/tsmc_samsung_chip_subsidies/ https://www.theregister.com/2022/03/28/tsmc_samsung_chip_sub... "Intel and Micron pushing hard for subsidies from the US government" -- https://www.pcgamer.com/intel-and-micron-pushing-hard-for-subsidies-from-the-us-government/ https://www.pcgamer.com/intel-and-micron-pushing-hard-for-su... "Subsidy Tracker: Intel" -- https://subsidytracker.goodjobsfirst.org/parent/intel https://subsidytracker.goodjobsfirst.org/parent/intel "Intel boss presses Congress for manufacturing subsidies" -- https://www.theregister.com/2022/03/24/intel_chips_subsidy/ https://www.theregister.com/2022/03/24/intel_chips_subsidy/

ChuckNorris89 4y ago
Sure, but that's US money propping up US companies, what's wrong with that?
- nosianu 4y ago
  TSMC, Samsung are US companies? And what is wrong with Europe propping up a US company? You shifted the goal post from your original comment ("When will we ever learn to build up our domestic tech industry?"). I showed you that the US is doing exactly that, and now you jump to some other argument.
  - birdyrooster 4y ago
    Wow and you got downvoted too… preposterous. You made a great point.
  - zymhan 4y ago
    They were talking about EU domestic production, I think, not the US. Therefore your reply is off-point.
    - deleted 4y ago
      [deleted]
    - deleted 4y ago
      [deleted]

HWR_14 4y ago

Does it really matter which country is the headquarters for the corporate owner? It's still a German plant hiring Germans and subject to German laws. The rule of law exists in both Germany and the US. German citizens can invest in Intel. And, in the event of a US/German war, that plant is and will remain German, not American. I think there's an excellent case for distinguishing that from companies from China, where non-Chinese citizens have a great risk of confiscation of their assets by investing, Chinese companies are subject to a lot of other rules even when operating outside China, etc.

ferruck 4y ago
The difference is that patents for inventions made for Intel by Intel employees go to the US, whether or not that employee is an US person. Those inventions, if made by Germans, could instead help the German - or European - tech sector. That's kind of brain drain without actually leaving your country and sustainably hurts European competitiveness.
- HWR_14 4y ago
  That just kicks the question down the road. It's not like patents don't share the exact same argument. There are US and German patents that only apply in their own countries. What difference does it make where the multinational that owns them receives mail. Unless you think Intel will refuse to do business with a European company vs a US one.
tut-urut-utut 4y ago
> Does it really matter which country is the headquarters for the corporate owner? It's still a German plant hiring Germans and subject to German laws. The rule of law exists in both Germany and the US. Of course it matters. The profit goes in the direction of headquarters, tax is paid in the country of headquarters, and the government of the country of headquarters has much bigger influence to the company.
- ChuckNorris89 4y ago
  >tax is paid in the country of headquarters Tax havens have something to say about that. The French semi giant, ST, is financially incorporated in the Netherlands (STMicroelectronics N.V.), as is the French giant Airbus (Airbus Group N.V.). There seems to be a pattern here. It's almost as if companies don't want to pay taxes, regardless if it's their home country.

mensetmanusman 4y ago

It’s all interconnected, Intel fabs are worthless without ASML, you can think of Intel as almost like a general contractor at this point pulling capabilities from everywhere.

amelius 4y ago
ASML should demand 30% of profits, like Apple does with its App Store.
- lotsofpulp 4y ago
  They do. https://www.macrotrends.net/stocks/charts/ASML/asml-holding/profit-margins https://www.macrotrends.net/stocks/charts/ASML/asml-holding/...
  - amelius 4y ago
    Profit margin is a different thing.
    - lotsofpulp 4y ago
      Ah, I missed “of” in 30% of profits. In which case, I thought Apple’s take was 30% of gross on the app store, not profit?

jimbob45 4y ago

Ideally, this brings a great deal of domain-specific knowledge to the EU and then the workers of this Intel plant are able to go create their own EU plants with their new knowledge. Whether or not that extremely ideal scenario actually happens remains to be seen.

raxxorraxor 4y ago

Should have just bought AMD a few years ago...

mrtksn 4y ago

FTA: Whether or not additional funds are available from the EU is not known. This is just Germany paying Intel to make unreasonable business decision reasonable. These things usually happen for strategic reasons. For example, it could be possible that from purely business perspective it's the best to produce all the food in Africa, Russia or China but this leaves EU vulnerable to stuff going on in these places or conflicts with them, therefore you have common agriculture policy and food import-export controls. The decision makers probably decided that completely relying on foreign IC supply is a risk they cannot afford, therefore they will pay to make it fixed. I wouldn't be surprised if EU also chips in.

deleted 4y ago

[deleted]

april_22 4y ago

there was a strong chip industry in saxony decades ago, but they became way too expensive when china came. they are slowly starting to built back there, but progress is slow. Bosch and Infinion have the fabs there

april_22 4y ago
sorry, misspelled infineon
DocTomoe 4y ago
You are refering to Robotron, which mostly is known for their Z80s knockoffs (which often were less buggy than the originals.) Given that they did not create chips of their new design, I would not describe them as having been 'strong', though.
- Matthias247 4y ago
  Maybe more about AMD having had fabs there, which then transitioned into Globalfoundries?
  - DocTomoe 4y ago
    Hm, "decades" implies GDR ... AMD eventually bought some of Robotron's facilities, though.
    - Matthias247 4y ago
      Possibly. But start of 2000 when AMD and Infineon in Dresden where in vogue is also more than a decade ago.
      - DocTomoe 4y ago
        True. I like to avoid thinking that way. It makes me feel old.

raverbashing 4y ago

> domestic semi companies (NXP, ST, Ericsson, Nordic, Infineon, Bosch, AMS, etc.) are only competing for relatively low margin chips with high competition Then maybe they should compete? (though those are not small companies - and with most products that are not as popular with Intel but are popular in other areas) I think they missed the ARM boat, possibly. But they should go and ask for a slice of that money.

DocTomoe 4y ago

> please name me another EU company There isn't any. That's because EU taxes and regulations make running a large-scale business less attractive - and because there really is no market for another big-chip manufacturer; if you want to break into that segment (even if it was a 'fair' market), the only way to compete is on the price, and that China can do better.

deleted 4y ago

[deleted]

MoreSEMI 4y ago

Zeiss-makes all the highly complicated mirrors that go into asmls machines XFAB-specialty fab in germany

oytis 4y ago

It would maybe make more sense if it was a foundry offering their services to numerous fabless companies. Having an advanced one in the EU would be beneficial regardless of where the headquarters of the foundry is. But this one is just going to produce Intel chips as I understand, so basically it's just workplaces, and not a huge lot of them compared to the investment made.

jagger27 4y ago

If Intel’s new EU fabs operate under the TSMC foundry model, is that not a good thing for the EU? Let’s say I’m a smaller company in France looking to get a chip made on a bleeding edge node. I don’t have existing contacts in Taiwan. Surely I just go next door to Intel, right? If Global Foundries couldn’t pull off the leap to 7nm even with ASML next door, who do you suggest is capable of doing so other than Intel, Samsung, and TSMC, and is EU based? I have some confidence that the EU would set favourable terms for given the level of investment.

deleted 4y ago
[deleted]

audunw 4y ago

If you want Europe to be as attractive as headquarter location of mega-companies as USA is, you may have to compete with USA on a lot of policies (taxes, labor laws, etc) that would turn Europe into a different kind of society. Do we really want that? Many of these mega-companies are publicly listed. Norway alone owns a significant amount of stock in some of these companies. I'm not sure we have a problem. But I'm not gonna complain about trying to change this and get giant high-margin tech company going here in Europe. I'm just not sure how to do it.

ChuckNorris89 4y ago
>If you want Europe to be as attractive as headquarter location of mega-companies as USA is, you may have to compete with USA on a lot of policies (taxes, labor laws, etc) that would turn Europe into a different kind of society. Do we really want that? No, but do you really have a choice? When you're selling tech products, you're competing on the international market, against everyone, including USA and China. If you work 35h/week and you get outmatched by a team who worked 60h/week, the end user will not care, they go for the best one, and the others loose. That's how international competition works. And if they can deliver a better product at a cheaper price, they get the customers. The customers don't care if the devs who worked on that product are from US, China, or Europe and if they worked 35h/week or 60+. That's why Europe is so underrepresented in big-tech internationally and the biggest wealthiest European companies are fashion related(LVMH) where the selling point is the name brand without any substance. That's why EU has not developed the iPhone and why Nokia, Ericsson, Sagem, Alcatel are gone from the mobile space.
- welterde 4y ago
  > That's why Europe is so underrepresented in big-tech internationally and the biggest wealthiest European companies are fashion related(LVMH) where the selling point is the name brand without any substance. Not sure market cap is really the metric here (and only 2 of the top 10 are currently fashion related, the rest is pharma, semiconductor, food, ecommerce, banking, etc.), since those can be easily inflated to completely unreasonable levels and are more an indicator of marketing success than anything else. Maybe take a look at the export statistics and you'll find machines and chemicals taking up a very large fraction. However much more interesting is how much of the global economy depends on certain companies: Siemens automation (larger market share than the next two competitors combined). Chemicals - BASF is currently the largest chemical producer in the world (with also the largest chemical production complex in the world being located in Germany). Semiconductors - Without ASML, Zeiss and Trumpf (nevermind all the chemical companies) you will have a hard time producing the chips in your iPhone or any modern desktop/laptop. No matter how much I am not a fan, but SAP might also be of relevance in a few companies.. Also Nokia and Ericsson are not gone from the mobile space, they just focus more on the backend stuff. So while your phone might no longer be from them, there is a decent chance that your phone will be talking to a Nokia or Ericsson device over the air (especially since Huawei hit a bit of a snag in the US and parts of the EU).

tester756 4y ago

We will have more semico experienced people how actually worked with state of art / bleeding edge stuff with them you'll be able to build start ups, etc.